how to write a study plan

LECTURE NOTE ON DEFINITIONS AND MEASUREMENT
OF POVERTY

By
Professor S.I. Oladeji
Department of Economics
Obafemi Awolowo University,
Ile-Ife.

Introduction The eradication of poverty has been declared by the United Nations World Summit for Social Development in 1995 as the unfinished business of the 21st century. The issue was also topmost in the agenda at the United Nations Millennium Summit in New York in September 2000. Apart from eradication of poverty and hunger, the other listed Millennium Development Goals (MDGs) include the achievement of Universal Primary education, promotion of gender equality and women empowerment, reduction in child mortality and improvement in maternal health care. Others are combating HIV & AIDS, malaria and other diseases, and developing a global partnership for development. Merely scanning through the list of MDGs will tend to suggest that poverty eradication is not only topmost, it is central and inextricably linked with most other goals, in particular health-related goals in the list. The relationship between poverty and health is circularly causal or, simply expressed, a two way process. For instance, there are mounting evidences corroborating the fact that where poverty is widespread, the vulnerability of child morality, problem of maternal health care, HIV & AIDS, malaria and other diseases are necessarily commonplace. At the same time, it is becoming apparent that many diseases are associated with poverty. Illness prevents people from working, affects their productivity and consequently impoverishes them or undermines their capacity to make appreciable income for better living standard. As a background for proper appreciation of the intricate relationship between poverty and health, some conceptual clarification is needful on the definitions and measurement of poverty. The word ‘poverty’ is an age-long concept, identifiable with socio-economic setting of human race in all generations. The Bible has since declared, “…. the poor will never cease out of the land,..” (Deut 15:11) and in Matt 26:11, Jesus said. “you [will] always have the poor with you, …”. The existence of a phenomenon is one thing, sufficient knowledge or understanding of it is another. What is poverty? Are you sure you know what ‘poverty’ really means? And can you determine who, really is poor? Yes, you may think that the poor is just the common man in the street, or a needy person. You may probably not be far from the truth, but not really the whole truth. For one thing, poverty is multidimensional that could span a whole lot of issues of human deprivation of all sorts. And for another, poverty is quite amorphous which is expressible in absolute as well as relative magnitude. A more operational definition of poverty is usually helpful for clear understanding of issue of this kind and to keep track of the status and trends of the phenomenon. An available statistical facts on poverty in Nigeria indicates the following, inter-alia.
* 35% of population lives in extreme poverty
* 54% are poor in relative terms
* almost 52% live on less than a dollar a day
* poverty incidence is highest in North East zone (63%), followed by North West (62.9%), North Central (62.3%), South –South (51.1%), South West (42%) and South-East (34.3%).
* about 63% of people living in the rural areas are poor, compared with 42% in urban areas.
(National Planning Commission (2007): Nigeria Millennium Development Goals 2006 Report)
The foregoing statistical information are not mere imagination or impressions, rather they have been generated by some scientific procedure using some measures of poverty. Some familiarity with measurement of poverty is imperative for objective assessment and perception of the issue. The presentation in this lecture is largely introductory and after students have studied the lecture, they should be able to explain different meanings of poverty identify the various aspects of poverty have insight into some definitions of poverty state some elementary measures and indicators of poverty
Aspects of Poverty There is no unanimously accepted definition of poverty. As a matter of fact it is almost never defined in itself, but through other concepts, such as growth, well-being, exclusion or equity. A basic feature of the concept of poverty is its complex and multidimensional nature which makes the plurality of definitions is inescapable. According to English dictionary, the word ‘poverty’ refers to the state of being very poor. Similar words (synonyms) for poverty include beggary, bankruptcy, debt, destitution, hardship indigence and insolvency. Others are penury, privation, want, dearth, insufficiency, lack, paucity and shortage. Apparently, these are words of negative or bad connotations which make poverty altogether undesirable phenomenon. It is generally abhorred for as expressed in Proverbs 10:15, the poverty of the poor is their ruin. The dictionary meaning is a general definition, lacking in specificity contextually. There is ambiguity as to the sense in which poverty is expressed. The word can be understood to mean the whole gamut of deprivations which may be economic, social, spiritual, political, cultural or in fact environmental. Clarity in terminology in this regard requires the need to make some distinction. Distinction can be made between material and non-material deprivation. Poverty in the sense of non-material deprivation relates more to the spiritual aspect of man rather than the physical being. For instance, poverty in the form of spiritual deprivation is a reflection of the debased human nature and the corruption of the human heart. This is a case of spiritual poverty, it manifests itself in greed, slavery and general powerlessness over the grip of sins. With Jesus, there was always the conviction the source of evil is in the human heart (Matt 15:18-20) and that true liberation begins with the intent of the individual to allow kingdom of God take possession of his heart. Except in the religious circles, spiritual poverty appears not to have received so much attention in what may be described as a materialistic world. Material deprivation has always been the emphasized and this relates to, on one hand, lack of physical necessities, assets and income. And, on the other hand, it has to do with relates to the general condition of deprivation such as social exclusion, vulnerability, lack of access to productive resources and basic social services and so on. In a more operational sense, material deprivation can be categorized into income poverty and human poverty. The former is understood as living with low income, low consumption, poor nutrition and poor living conditions. Human poverty, on the other hand, describes the conditions of low health and low education. Where as the dichotomy of income and human poverty is needful to achieve operational objectives and for the purpose of appreciating action points for poverty eradication, the two are nonetheless not really mutually exclusive. Income poverty, in most cases, is associated with the so-called human poverty in a vicious circular manner. As a matter of fact both culminate in social deprivations, namely high vulnerability to adverse events such as diseases, economic crisis or natural disaster, voicelessness in the society and powerlessness to improve living circumstances. The multidimensionality of poverty has been stressed and succinctly expressed in the Copenhagen Declaration on Social Development in the following manner:
“Poverty has various manifestations, including lack of income and productive resources sufficient to ensure sustainable livelihoods; hunger and malnutrition; ill health; limited or lack of access to education and other basic services; increased morbidity and mortality from illness homelessness and inadequate housing; unsafe environments; and social discrimination and exclusion lack of participation and exclusion. lack of participation in decision-making and in civil, social and cultural life”. [World Summit for Social Development, Copenhagen, 1995]

Apparently, the multidimensional nature of poverty is what has given rise to the plurality of definitions and for now, the conceptualization of definition of poverty is still in progress.

Definitions of Poverty The first conceptual approach to poverty is expressed in terms of household income or consumption. By this definition, people are considered poor if and only if they do not have sufficient income to enjoy a certain level of well-being. In the operational sense, a person is considered poor if his income or consumption is below a predetermined poverty line, which will be explained shortly. Another definition, developed by UNICEF identifies certain basic needs, such as food, clothing and shelter that must absolutely be fulfilled to keep people out of poverty. Poverty, in this sense, is defined as deprivation in the material requirements for minimally acceptable fulfillment of human needs, including food. This deprivational concept goes far beyond a lack of private income: it includes the need for basic health and education and essential services that must be provided by the society to prevent people from falling into poverty. A further attempt to have a more comprehensive definition of poverty comes from the UNDP. The definition draws on several other definitions, integrates their fundamental elements and enhances the process with a focus on the concept of a lack of capabilities. The concept, aptly referred to as human poverty, defines poverty as a state of deprivation or denial of the basic choices and opportunities needed to enjoy a decent standard of living, to live a long, healthy, constructive life and to participate in employment and in the social, political and cultural life of the community.
Measures and Indicators of Poverty Economists have differed as to whether poverty should be measured in absolute sense, defining poverty as people falling below some fixed minimum income or consumption level; or whether it should be defined in relative terms, so that poverty means inability to afford what average people have. If an absolute measure is accepted, it is at least conceivable to have everybody lifted above the poverty line whereas if poverty is measured in relative sense, some people will at least fall below the so called poverty line, which means the poor will always be with us. Poverty line is a basic measure and an instrument for identifying and measuring income poverty. It is defined as an arbitrary income measure, usually expressed in constant dollars (e.g. $1 per day), used as a basis for estimating the proportion of a country’s population that exists at bare level of subsistence. Based on household income or consumption, poverty lines quantify absolute poverty in monetary terms and characterize people in terms of their monetary income or consumption, particularly of food. Thus, a poverty line is just a cut-off line (or threshold) used to distinguish between “poor” and “non-poor” households Setting a poverty line permits the calculation of the following poverty indicators poverty rate or incidence of poverty depth of poverty or poverty gap severity of poverty
- The poverty rate or incidences of poverty, is simply an estimate of the percentage of people living below the poverty line.
- The depth of poverty is measured as the average distance below the poverty line, expressed as a percentage of that line. It is also called the poverty gap as it shows the average distance of the poor from the poverty line.
- The severity of poverty is measured as a weighted average of the squared distance below the poverty line, expressed as a percentage of that line. The weights are usually given by each individual gap. Since the weights increase with poverty, this measure is sensitive to inequalities among the poor.
One final measure of poverty, credited to the United Nations Development Programme (UNDP) in its 1997 Human Development Report, was introduced against the background of dissatisfaction with the dollar –a –day World Bank income measures. As articulated in the Report.
“Poverty has many faces. It is much more than low income. It also reflects poor health and education, deprivation in knowledge and communication, in ability to exercise human and political rights and absence of dignity confidence and self-respect” [UNDP, Human Development Report, 1997]. Hence, in place of the World Bank’s notion of income poverty, the UNDP developed a measure of human poverty – that is, human poverty index (HPI). The HPI constructed is a multidimensional measure of poverty, incorporating three key deprivations in respect of survival, knowledge, and economic provisions. The deprivation in longevity (survival) is measured as the percentage of people not expected to survive to age 40, and the deprivation in knowledge is measured by the percentage of adults who are illiterate. The third deprivation, economic provisions, relates to a decent living standard. It is represented by a composite of three variables, namely the percentage of people without access to safe water, the percentage of people without access to health services, and the percentage of malnourished children under five.
The measure, HPI, provides a quantitative and more comprehensive poverty indicator when compared to income poverty index. Income poverty, no doubt, needs to be measured, but income alone is too narrow a measure. Thus, HPI developed by UNDP, provides a more robust and broad measure of poverty indicator, summarizing the extent of poverty along several dimensions. The index makes possible a ranking in relation to a combination of basic deprivations and also serves as a useful complement to other measures of poverty and human deprivation-including income poverty. A shortcoming of HPI, however, is that it is somehow aggregative as it is not possible to associate the poverty incidence with a specific group of people or number of people.

Concluding Remarks A problem identified, it is said, is almost solved. Apart from proper diagnosis of the problem, identification requires an operational definition and measurement of the phenomenon in focus. The issue of poverty has been in focus in this lecture and the attempt has therefore sought to provide a review of the definitions and measures of the problem. Poverty is a mass phenomenon in sub Saharan Africa, including Nigeria. It is not really a simple and straightforward concept; rather it is complex, dynamic and multi-dimensional in nature. The phenomenon presents itself as a situation of pronounced deprivation of all kinds which could be material or non-material in nature; and income of human poverty. As far as operational definition is concerned, the understanding of poverty has evolved considerably from a simple notion of low income and low consumption, characterized by poor nutrition and poor living conditions. It is becoming more apparent that poverty is far-more complex than material deprivation with mere emphasis on income. This traditional notion of income poverty has thus given way to the idea of human poverty. The concept of human poverty is an attempt towards having a comprehensive understanding of poverty, having realized the multidimensionality of the phenomenon. In contrast to income poverty, human poverty as developed by UNDP, encompasses both monetary aspect (i.e. inadequate income and consumption) and aspects related to the accessibility of essential services and lack of capabilities. The problem of poverty in sub-Saharan Africa is an overall development problem that should be analysed from the perspective of sustainable human development paradigm. The relevant indicators in the context are therefore the Human Poverty Index (HPI) and the related measure of human development, the human development index (HDI). These have always been taken into account in the UNDP’s design of national reduction strategies in such countries as Benin, Botswana, Lesotho, Namibia and South Africa. This has not been case in Nigeria which shares virtually the same development challenges as these countries. The statistical information on profit profiles in Nigeria have all along been compiled based on the notion of income rather than human poverty. It is hoped that Nigeria will follow this human poverty approach in view of the dynamics and multidimensionality of the phenomenon. The adoption of this approach will provide an effective instrument for moving beyond the narrow framework of income poverty to a comprehensive assessment of human poverty in the country.